FASB votes to defer effective date of revenue recognition standard
The Financial Accounting Standards Board (FASB) voted on July 9 to approve a one-year deferral of the effective date of Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers.
The board originally announced in April that it was planning to defer the date of the standard coming into force until 2017.
"As a result, public business entities, certain not-for-profit entities, and certain employee benefit plans will apply the new revenue standard to annual reporting periods beginning after December 15, 2017. All other entities will apply the new revenue standard to annual reporting periods beginning after December 15, 2018," the board announced yesterday. Private companies will have another year after this, that is, December 15 2019, to use it for their interim reporting.
All companies, both public and private, will be allowed to adopt the standard earlier than December 15 2017 if they want to, but not before December 15 2016, the original effective date for public entities.
The FASB expects to issue its final Accounting Standards Update formally amending the effective date by the end of the third quarter of 2015.